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Satyam shares / stock soars as India appoints new board members

Shares of Satyam Computer Services staged a sharp recovery Monday after their recent crash, as the government’s decision to appoint new members to its board raised hopes the software major may be rescued after India’s biggest corporate fraud came to light at the company last week.

After losing nearly 87% of its value in just the previous two sessions, Satyam
stock soared 45.9% by late afternoon trading in Mumbai.

Nonetheless, the stock is still 81% below its value from before the company announced it had overstated the cash it held by over $1 billion. The New York Stock Exchange has not allowed Satyam’s U.S.-listed shares to trade since the scandal erupted.

The jump on Monday came after the government got into the act to protect the company and its 53,000 employees, and appointed well-known professionals such as Deepak Parekh, Kiran Karnik and C. Achutan to the company’s board.

“The appointments will help because they have lent some credibility, which is the most important thing for the company after recent events,” said Tejas Doshi, head of research at Sushil Finance in Mumbai.

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